Most Americans don't expect to face workplace discrimination on the basis of race, gender, age, disability and so on. What they might not realize is that these protections don't apply across the board. Norm Handshear learned this lesson the hard way.

After a lengthy career as a human resources executive, Handshear had been employed as a part-time instructor, teaching classes to colleagues in the field to help them gain certifications. He was one of the several million Americans working as independent contractors or in other contingent-employment arrangements – about 1 in 7 jobs.

Earlier this year, Handshear was looking forward to accepting additional part-time instructor assignments for WorldatWork, a human resources association based in Scottsdale, Arizona. Over the years, he said he received consistently favorable evaluations from students in courses taught around the country. But in May, he received notice that his services no longer were needed.

"This was just age discrimination," said Handshear, 70, who lives in the St. Louis area and, somewhat ironically, used to be the organization's president and chairman.

WorldatWork issued a statement contesting his discrimination assertion and explaining that it has more instructor applicants than it needs for its courses.

Handshear, as an independent contractor rather than an employee, quickly realized there wasn't much he could do about it.

While millions of Americans work as contractors, consultants for temp agencies and in other contingent or freelance positions, the discrimination protections regarding age, gender, race, disability and so on don't apply to them. For age discrimination, the protections enjoyed by employees normally kick in at 40 and above.

Roughly 14 percent of American workers, or 21 million people, described themselves as independent contractors or working in contingent or temporary assignments, as on-call or temporary-help staff or in other alternative-employment arrangements, the Bureau of Labor Statistics said in a survey released in June.

About half of those people are independent contractors, and some of the rest also likely would lack the anti-discrimination protections enjoyed by employees, though the survey wasn't conducted to measure that.

Other studies suggest the contingent workforce could be much larger, such as a study this year by California-based Staffing Industry Analysts, which estimated 44 million Americans, around 29 percent of the workforce, recently held these types of jobs.

How workers differ

Independent contractors differ from employees in various ways. A summary by the federal Department of Health and Human Services highlights some of the key points:

The hiring process for employees typically is handled by human resources staff, who request information such as marital and citizenship status and issue a W-2 tax form. Employees are paid on an hourly basis or earn a salary, with paychecks issued on a set schedule.

Independent contractors, by contrast, typically interact with the manager or other person with whom they work and enter into a contract. Contractors fill out a W-9 tax form, and their pay often is for a total amount that ends on a specific date or when the job is finished – and they usually must submit an invoice.

Employees, but not contractors, often receive paid vacation days, health insurance, 401(k)-style matching funds and other benefits. And as noted, they're covered by legal protections to which independent contractors aren't entitled.

Jodi Bohr, an employment-law attorney at Gallagher & Kennedy in Phoenix, said she thinks most contractors realize they're not employees, though they might not recognize all the legal implications.

"When you enter into an employment relationship – or any relationship – you're probably not thinking of what could go wrong and the protections you might or might not have," she said.

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Key legal distinction

The U.S. Equal Employment Opportunity Commission notes that the anti-discrimination laws that it enforces don't apply to independent contractors, as well as those working for employment agencies and in various other situations. Protections also may depend on the number of employees a company has. The federal agency offers more guidelines here and on its website, eeoc.gov.

Yet the differences between employees and independent contractors aren't always clear-cut. It largely comes down to the degree of control exerted by the employer and the degree of independence retained by the worker. The anti-discrimination protections could apply to independent contractors if the nature of the work relationship indicates the person really was an employee, the EEOC said.

The Internal Revenue Service has a four-page form, SS-8, with more than 50 questions to guide businesses through the exercise. The IRS wants to know which party – employer or worker – should be responsible for paying payroll taxes and whether the company should withhold income tax.

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Contingent workers, beware

Handshear said he was told by a couple of employment-law attorneys that he would have had a strong age-discrimination lawsuit if he were an employee, though he wasn't.

A WorldAtWork spokeswoman, Melissa Sharp Murdock, issued a statement contesting Handshear's assertions and affirming that nobody should face discrimination for age or other reasons. But she also said the company has a large pool of potential instructors, with the result that many people who expressed interest in teaching courses were not selected.

Nevertheless, the dispute exposes some of the issues that people might want to think about if working as independent contractors or in other alternative job arrangements.

"If you're an employee, you have protection; if you're a contractor, you don't," Handshear said. "There's a huge gap in the law – a lot of people aren't protected, and I don't think most of them have a clue that they're not protected."